Market confidence boosts steady rise in steel prices

This week, the overall performance of the domestic steel market has been steadily rising and rising, and the price of sheet metal has declined slightly over the weekend. As of November 8, the average price of 6.5mm high line in major cities was 3,546 yuan, up 40 yuan/ton from the last day of last week; the average price of 25mmHRB400 rebar was 3,585 yuan, up 60 yuan/ton from the last day of last week; The average price of 20mm plate is 3487 yuan, which is 14 yuan/ton higher than the last day of last week; the average price of 4.75mm hot plate coil is 3539 yuan, which is 23 yuan/ton higher than the last day of last week; 1.0mm cold rolled coils are Price of 4377 yuan, compared with the last day of last week rose 3 yuan / ton.

In the first and fourth quarters, the economic recovery is expected to recover from overcapacity and heavy blows occurred. The first and third ministries focused on resolving excess capacity: On the 4th, the National Development and Reform Commission and the Ministry of Industry and Information Technology jointly held a “Video Conference on Implementing the State Council’s Guidance on Resolving the Contradiction of Serious Overcapacity”. The next phase of the process of resolving the issue of production capacity put forward an overall working guideline; on the same day the “Banking Industry Resolving Overcapacity and Practicing Green Credit Conference”, the China Banking Regulatory Commission put forward six policy measures including differentiated credit to support the resolution of production capacity. Excess, promote the transformation and upgrading of the real economy.

2. The Third Plenary Session’s flagging trend The Chinese economy will continue to recover in the fourth quarter: Recently, a survey of international economists and political analysts shows that the international community’s views on the Chinese economy for some time to come are quite optimistic. Eighty-seven percent of respondents said they are confident that the Chinese government will implement the next blueprint for reform after the Third Plenary Session. However, global banks such as Deutsche Bank, Standard Chartered, China Gold, and UBS generally believe that the Chinese economy can still achieve growth of more than 7%.

3. In October, the four major banks added ** 182 billion yuan to hit a new low for a single month during the year: The reporter learned that October's four major banks' new ** launches were only about 182 billion yuan, a decrease of nearly 40 billion yuan from the same period last year. At present, people in the market are expected to spend more than 500 billion to 600 billion yuan in the overall credit supply of financial institutions in October.

4. In the future, the central bank will focus on creating a stable monetary and financial environment: “We will not loosen or tighten monetary policy,” “Maintain strength, and exert precision.” In the future, the focus of monetary policy implementation will be based on the discussion of Premier Li Keqiang and create a stable currency and finance. surroundings.

5. The agency forecasts October CPI: 3.3% or new high: According to the National Bureau of Statistics, the Consumer Price Index (CPI) will be released tomorrow in October. According to statistical data, the average forecast of 10 institutions' CPI inflation in October was 3.3%, which is a record high for 17 months.

6. The new government has pushed for a new urbanization urbanization plan or introduced within the year: Since the establishment of the new government, it has repeatedly emphasized that “urbanization is the greatest potential for domestic demand” and “to promote the new urbanization based on people”. . It is generally expected that the urbanization development plan will be introduced after the Third Plenary Session of the 18th CPC Central Committee and this year is expected to become the year in which China will promote urbanization.

Second, both crude steel and inventories fell. The market’s confidence was boosted. The latest data from China Iron and Steel Association showed that the average daily production of crude steel in the country in late October was 2.09842 million tons, down by 0.4% from the previous month. Among them, the key steel enterprises estimated the average daily output of crude steel was 1,703,300 tons, which fell by 0.49% compared to the previous period.

In addition, as of the end of October, the steel stocks of key enterprises were 12.87 million tons, a decrease of 912,000 tons or 6.6% from the previous ten days; compared with the end of September, steel inventories of key enterprises fell by 263,000 tons, a decrease of 2.1%. According to statistics, this is also the second consecutive decline in corporate inventories and then fell again.

As a whole, the country’s crude steel production dropped for two consecutive ten days. Under the circumstances of increasing environmental protection efforts, the possibility of continued decline in the production of crude steel in the later period is greater. At the same time, with the stabilization of steel prices, the enthusiasm of downstream users entering the market has increased. Market stocks continued to decline, and both sent positive signals. The strengthening of the government's management efforts and the upcoming policy expectations of the Third Plenary Session of the 18th CPC Central Committee will boost confidence in the domestic market. The short-term domestic steel prices are expected to increase. Will continue to be steady and strong.

Third, the resource ratio and the demand for different steel materials, stable raw materials, chaos adjustments This week, the domestic raw material market as a whole showed a steady shock rising adjustments, including billet prices rose significantly, coke prices slightly pulled up slightly, while scrap fell slightly. The steel billet market was affected by the overall improvement of downstream finished product shipments this week, the existing market resources were reduced, the steel mills increased their sentiment, and Tangshan Yansteel’s bid price rose significantly. This drove the continuous increase in billet prices this week; the coke market was In the smooth shipment this week, the prices also rose slightly; the scrap market entered the off-season and the market confidence was obviously insufficient. Some manufacturers' sentiments were apparent, and some market prices also fell slightly. For the next week, in the current situation of relatively firm manufacturers, plus the next week, the manufacturers will gradually introduce a mid-term policy, and the possibility of greater rise, so the current cost of steel prices strong support.

Fourth, the traditional demand off-season is approaching attention to the demand for winter storage The overall trend of downstream demand has remained stable. From a single month's data, real estate development investment in June, July and August increased by 19.45%, 21.23% and 13.09% year-on-year, respectively. In August, this growth rate fell to the lowest level in the year, with a sequential growth rate of 31.67%, - 25.48%, 4.61%. In June, July and August, the fixed assets investment in railways was 58.3 billion yuan, 45.8 billion yuan and 51.5 billion yuan respectively, and the railway infrastructure investment was 54.6 billion yuan, 42.4 billion yuan and 48.1 billion yuan respectively. In July, Both the year-on-year growth rates showed a relatively large drop, and they rose again in August. This shows that in July of this year, railway infrastructure investment fell more significantly due to high temperature and other weather factors. There is no new trend in policy guidance at present, and more is to maintain stability on the basis of maintaining the lower limit of economic growth. Large-scale and substantial stimulus policies are still difficult to emerge. Terminal demand release in September was obviously worse than expected. In the fourth quarter, October is the peak season, and demand is slightly higher or slightly higher than September, and will gradually enter the low season after November.

However, according to historical data, the fourth quarter of each year is the period when new projects and planned investments are usually fast. At present, the inventories of iron ore ports are at a low level, and the demand for winter storage of northern steel plants is good, which will form a support for steel prices.

V. The policy of steel mills have increased their confidence in the market. Since the beginning of this week, all manufacturers have raised their factory policies. In particular, the upward adjustment of the attitude of building materials manufacturers is the most obvious. The plate manufacturers are the second largest, among which are new steel, Weigang, Fugang, Shuigang, and Japan. Steel, Liuzhou Steel and other manufacturers have raised the building materials by RMB 10-100/tonne; Hebei Advance, Rigang, Liusteel, Xingang, Puyang, etc. have also raised their plate prices by RMB 10-50/ton; overall From the perspective of building materials manufacturers, the rising trend is obviously stronger than that of plates. However, taking into consideration the steady fall in ex-works prices of Shagang and Hebei Iron and Steel in early November, it also reflects that current leading manufacturers are not very optimistic about the steel market in the off-season, but as the market price is significantly higher than the ex-factory price, in mid-November Shagang, Hebei Iron and Steel and other manufacturers ex-factory policy increase will be a foregone conclusion. With the recent declining stocks of steel mills in the market, confidence in the market outlook will also increase significantly.

In summary, with the convening of the Third Plenary Session of the 18th session of this week, coupled with the current state’s increase in overcapacity and environmental protection efforts, it will boost confidence in the short-term market, and also in the later period. The pressure on the slowdown in the supply of market resources has played a positive role in restraining the market. Therefore, the combined pressure on the overall inventory resources in the current market is not high, and some market resource shortages have not yet completely eased. Next, it is expected that domestic steel prices will continue to fluctuate and rise steadily in the next week. However, attention should be paid to the effect of demand release on the rebound of steel prices.